Commentary by Executive Director, Albert Gray

May 2, 2010

Career Colleges Deserve a Say

By Albert C. Gray

In late January, the U.S. Department of Education held the third and final round of negotiated rule-making discussions to examine a set of 14 rules that would potentially affect career and technical colleges. Negotiated rule-making by the department is intended to carry out some of the provisions of the Higher Education Opportunity Act of 2008, the latest reauthorization of the federal law that makes available federal student aid and preserves institutional quality and integrity.

The group of negotiators included representatives of the Education Department, nonprofit associations, and public and for-profit institutions, as well as consumer groups. To pass the proposed ruling, the negotiators must come to a consensus on all 14 rules. Disagreement over one rule can halt the entire process. Because federal and sector-based negotiators could not reach consensus on several key issues, none of the rules will be adopted until the department completes a notice-of-proposed-rule-making process.

The department expects to release the proposed regulations this spring or in early summer, followed by a 30- to 45-day window for written public commentary. That commentary will be considered by the department in formulating its final version of the regulations, which are expected to be ready for the Federal Register by November 1 and effective next year.

Over all, the failure to reach consensus during negotiated rule-making was disappointing but not surprising. The issues are vexing and complex, and not easily resolved through the prescribed process. More significantly, a basic lack of understanding about the career-education sector and the role of accreditation persisted throughout the negotiations, particularly in two crucial areas:

Gainful employment. Under new requirements, colleges will have to show that a given percentage of their graduates have found gainful employment. During the negotiated rule-making, however, the definition of "gainful employment" provoked strong responses from all higher-education representatives—career colleges and traditional colleges alike. The "gainful employment" provision would mean that students' indebtedness would be tied to how much money they would earn in their intended professions upon graduation. The Education Department developed a new formula to determine a graduate's gainful employment, ultimately coming up with the following definition: The person's annual debt payment over a 10-year period would be required to stay below 8 percent of his expected earnings.

Negotiators from career-education colleges and traditional institutions questioned the workability of the proposal, the rational basis for the 8-percent threshold, and the unintended negative consequences. Among other considerations, some high-cost, high-tuition programs offered by career colleges, like culinary arts or cosmetology, will face closure unless the salaries and wages for those legitimate and high-demand occupations are substantially increased—a function of economic conditions that are out of the institutions' control. The hospitality and aesthetics industries will confront even more profound shortages of qualified workers than exist today.

Of all the state, federal, and independent entities that scrutinize and review institutional performance regarding placement in the field, none have more direct and recurring access to data than national accreditors. Before the Education Department requires certain student debt-to-earnings ratios that may have little to do with institutional quality or integrity, it should consider collaborating with accreditors to refine, strengthen, and focus job-placement reporting, analysis, and compliance.

The emphasis on continuous improvement of institutional performance by accreditors like the Accrediting Council for Independent Colleges and Schools, where I serve as president, has established a foundation for gaining participation in and fidelity to quality assurance. Accreditors review and measure student retention and placement, and maintain quantitative and qualitative standards on measurement of satisfactory academic process, student learning, and student and employer satisfaction. By adjusting the frequency, specificity, and depth of job-placement data required of member institutions, accreditors will have an enhanced ability to develop models of best practices and share—or ultimately require—their application.

Incentive compensation for recruiters. The negotiators remained undecided on the proposed rule on incentive compensation for recruiters and admissions staff. Rules proposed by the department would eliminate any monetary compensation for admissions representatives based on the number of students they enroll. Most objections to incentive compensation for admissions representatives are rooted in recruitment abuses by a small number of marginal institutions more than 20 years ago.

Helping working adults overcome their fears and anxieties about participating in higher education requires institutional representatives who are motivated. The ability to reach out to nontraditional adult learners, who make up a significant segment of the career-education population, is important for two reasons. First, more than likely, they have attempted postsecondary education in the past and have not succeeded, leaving them fearful of repeating that experience. Second, they lack the support system available to newly minted high-school graduates: parental resources, encouragement, familial alumni legacies. Adult students benefit when the institution reaches out to nudge, encourage, and motivate. Completely eliminating a reward system that is tied to effective student enrollment could reduce the number of potential students who are attracted to, and ultimately enroll in, programs that will improve the quality of their lives.

Reward structures in a variety of industries are moving toward such incentives, and many people in the education sector believe that demonstrates a best practice in student recruitment and retention. Career colleges encourage recruiters to help bridge the gap between working adults who would benefit most from career training and their enrollment in an appropriate postsecondary-education program. It is sound practice to link a portion of admissions-staff compensation to its members' success in reaching recruitment goals.

What the Education Department and sector-based negotiators failed to recognize is that the emphasis on outcomes does not end with recruitment. Colleges that are accredited by the Accrediting Council for Independent Colleges and Schools are focused on learning outcomes for students and are required to meet and maintain high standards in areas like student retention and job placement. Our organization is the country's largest national accreditor of career-education institutions recognized by the Education Department and the Council for Higher Education Accreditation, and colleges that do not maintain the retention and placement standards can lose accreditation.

We national accreditors work directly with career colleges to share best practices on program offerings, job placement, and meeting work-force demands. Neumont University, in Utah, is just one example of a nationally accredited career college that exemplifies placement standards as underscored by accreditors. Neumont offers a bachelor's-degree program in information technology and has successfully placed 90 percent of its graduates in related jobs, even in a down economy.

We at the council understand the value of outcome-oriented accreditation in ensuring the best interests of students. We invite those in doubt to review our accredited institutions to better understand the measures taken to secure jobs. Further, we encourage the Education Department to continue to work effectively with accreditors to craft rules that are appropriate and that serve the public interest.

Albert C. Gray is executive director and chief executive of the Accrediting Council for Independent Colleges and Schools.